Greece may receive aid in installments

CASH INJECTION:：Whether Athens gets the next 8.1 billion euro tranche of aid in one go or split up will depend on whether it can meet its commitments, Ollie Rehn said

Reuters, MIKKELI, Finland, and ATHENS

Sun, Jul 07, 2013 - Page 13

Greece could get its next tranche of international aid in installments, the EU’s top economic official said on Friday, keeping the country in a hand-to-mouth existence that threatens to stifle its economy.

Athens had hoped that eurozone finance ministers would sign off on the next 8.1 billion euro (US$10.4 billion) tranche of aid when they meet tomorrow, even though Greek officials have conceded the government will not meet an end-of-week deadline for reforming the public sector.

On Friday, European Commissioner for Economic and Monetary Affairs Olli Rehn confirmed what many officials have said privately — that the tranche could instead be split into several installments.

“It is possible, but not certain,” Rehn told a seminar in his hometown of Mikkeli, Finland, when asked about the issue. “It all depends on whether Greece can meet all requirements that they are committed to.”

In Athens, Greek finance ministry officials said the two sides were “close” to a deal.

“The chances of reaching a deal tomorrow have risen,” a senior official said after the latest round of negotiations with the troika that lasted more than four hours.

Asked if Greece would receive the money in one go, the official replied: “The tranche will be such as to cover our needs.”

Rehn said earlier that talks involving the IMF, the European Commission and the European Central Bank, which make up the “troika” of lenders, would “continue as long as needed.”

The euro fell slightly against the US dollar on Rehn’s comments. Athens has said it expects to reach a deal by tomorrow’s meeting of eurozone finance ministers, despite failing to meet the deadline at the end of last month to identify public sector workers to be redeployed or laid off.

Greece has proposed putting 3,500 municipal police workers immediately into the scheme and transferring high-school teachers to primary schools with staff shortages, officials at the administrative reform ministry said after talks on Friday. It was not clear if the troika had accepted the proposal.

Dozens of municipal workers chanting “Down with the junta of the troika men!” protested outside Greece’s Administrative Reform Ministry during a meeting between the inspectors and Kyriakos Mitsotakis, the newly appointed minister tasked with making the civil service leaner and more efficient.

Greece has been kept afloat by emergency loans since May 2010, a few months after revelations about its debts ignited a crisis that shook the eurozone and threatened to force Greece to give up the shared currency.

The latest loan installment is one of the last big cash injections that twice-bailed-out Athens stands to receive as part of a 240 billion euro rescue package that expires at the end of next year.

It needs the money in part to redeem about 2.2 billion euros of bonds next month.

The public sector layoffs and privatizations needed to win aid are an incendiary issue as Greeks struggle through a sixth year of recession with record high unemployment.